October 24, 2012 / 8:05 PM / in 6 years

Obama plans to remove housing regulator if re-elected -FT report

WASHINGTON, Oct 24 (Reuters) - U.S. housing regulator Edward DeMarco is likely to lose his job overseeing government-controlled mortgage giants Fannie Mae and Freddie Mac if President Barack Obama wins re-election, the Financial Times reported on Wednesday.

Many liberal advocacy groups and Democrats on Capitol Hill have pressed Obama to replace DeMarco, the acting director of the Federal Housing Finance Agency who has denied requests from the White house to implement a housing rescue program that reduces mortgage principal for troubled homeowners.

The Financial Times, citing people familiar with the matter, said that due to DeMarco’s unwillingness to be as aggressive as the White House would like on certain policies and past clashes over the execution of anti-foreclosure efforts, the administration hopes to oust him in the coming months.

The story said Obama administration officials — including Gene Sperling, director of the National Economic council, and Jon Carson, director of the White House’s office of public engagement — have told Democratic groups the president would likely use a “recess appointment” to name a replacement for DeMarco.

A recess appointment would allow Obama to replace DeMarco without the need to win Senate backing for his successor.

The report did not name any possible replacements.

The Obama administration attempted to replace DeMarco in 2010, when Obama nominated Joseph Smith, who was then North Carolina’s banking commissioner. Smith withdrew his name after a few months due to staunch Republican opposition.

Obama has defied Republicans with recess appointments in the past, most recently when he installed Richard Cordray as head of the country’s consumer financial watchdog. That move incensed Republicans, who have vowed to block Obama’s picks for other high-profile financial regulatory posts.

DeMarco became acting head of the FHFA in 2009. He has worked at the agency and its predecessor since 2006.

As head of the FHFA, DeMarco oversees operations at Fannie Mae and Freddie Mac, which have drawn more than $190 billion from the U.S. Treasury to stay afloat since they nearly became insolvent during the financial crisis.

Fannie Mae and Freddie Mace buy mortgages from lenders and package them into securities, providing a guarantee to make investors whole if the underlying loans default.

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